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Only two extra steps to make your Power Purchase Agreement a GreenPower®-accredited PPA

At the GreenPower® forum last week, the new GreenPower® Guide for Businesses was launched, which was developed by 100% Renewables for the National GreenPower® Accreditation Scheme. The forum brings together the GreenPower® administrators, retailers, network providers, businesses purchasing renewables and other relevant stakeholders.

Barbara Albert from 100% Renewables and Raj Mahanama, Senior Project Officer at DPE

One of the items that were workshopped was the uptake of Power Purchase Agreements in the business community. Corporate PPAs are becoming more common in Australia due to organisations wanting to manage their exposure to volatile electricity and LGC prices and ambitious renewable energy and carbon commitments. PPAs can be for LGCs (or power) only, or for both LGCs and renewable electricity, which is called a ‘bundled’ agreement.

It is a little-known fact that most PPAs can be made GreenPower® accredited, just by undertaking a few extra steps. Firstly, the generator has to be (or become) a GreenPower® generator. To become a GreenPower® generator, the renewable energy plant must be accepted in the community, and waste-to-energy plants, renewable energy generation from native forest waste and large-scale hydro projects that negatively impact the environment are excluded.

Secondly, the GreenPower® LGCs coming from the generator have to be retired through a retailer. Your organisation cannot retire the LGCs yourself, as the two-tier auditing process of the GreenPower® program only extends to generators and retailers, not to businesses buying GreenPower®.

There is still a lot of uncertainty about the value of LGCs under the National Energy Guarantee (NEG), as well as how emissions reductions are treated. One thing that has been flagged is that GreenPower® purchases will not be double counted for meeting an emissions target under the NEG, meaning that they will be additional. This is great for your organisation if you want extra assurance that your efforts are creating more renewable energy than would otherwise have been developed in Australia. Being accredited under GreenPower® also gives your organisation assurance of both the renewable energy generation as well as the retirement of the LGCs, which results in a high amount of credibility.

Let’s take the example of a bundled PPA. Under a bundled PPA, your business purchases both the GreenPower® LGCs, as well as the power from a renewable energy project. There are two options for your business to enter into a GreenPower®-bundled PPA. The first option is to use your retailer to facilitate the PPA. This option is usually called a ‘sleeved PPA’ and is graphically displayed below.

The second option is to enter into a direct PPA with the renewable energy generator, which is usually called a ‘virtual’ or ‘finance’ PPA. In both instances, the renewable energy generator needs to be accredited under the GreenPower program.

The following graphic has been taken from the GreenPower® Guide for Businesses and shows a bundled sleeved GreenPower® PPA.

Image Credit: GreenPower® for Businesses Guide, bundled sleeved GreenPower PPA

So why not make your Power Purchase Agreement a GreenPower® accredited one? For more information or to obtain a copy of the GreenPower for Businesses Guide please contact the National GreenPower Accreditation Scheme via greenpower.admin@planning.nsw.gov.au.

100% Renewables helps large energy users with transitioning to renewables. If you need help with purchasing renewable energy, please contact Barbara or Patrick.

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